15,000 Governm ent o f India
P L A N N I N G C O M M I S S I O N
REVIEW OF
DO0677
MAY, 1957 PRINTED IN INDIA BY THE GENERAL MANAGER/ GOVT. OF INDIA
PRESS,
NEW DELHI AND PUBLISHED BY THE MANAGER OF PUBLICATIONS, DELHI, 1957
20 P.C.
Otte _
J * » i n .... ^•••itg ^ Ed*Q»«<oaa7
CORRIGENDA TO THE REVIEW OF THE FIRST FIVE YEAR PL^N
Chapter/ Page Para/Col. Line/Item For Read Annexure
I 2 3 4 5 6
Chap. V 12? 16 Line 1 co-perative co-operative
Chap. V H 141 18 Line 4 project projects Chap. X I V 278 16 L in e
8 2,68,207 26,820
93 278 Line 14 2,030 r.urse 2,030 nurses Chap. X V 287 5 L in e 1
below the table lask lack
287 6 L in e 3 from bottom schemes scheme
3 J 287 » Lin e 2 from bottom schemes scheme Chap. X V I 299
(table) 1 2 Uibun housing Housing Annexure T 339 7 Grand Total 3925
'1 . 39252-1 Anrexure II 35° 6 Total: Part ‘A ’ States 4 4 7 '7
477-7
3 3 385 4 M anipur 40-0 4-0 3 3 385 5 G rand T otal 344-23 344-3 3
? 385 8 33 1745 -6 1235-6 j; 33
388 388
858-79 858-9 D elete (<;)
}> 391 9> Centre 27-0 352-0 33 391 10 3) 352-0 494 -0 53 391
11 >3 494-0 . . » 393 6 Saurashtra 70-6 79-6 33 39i 7 >3 76-9
7 9 -6 5> 395 7 Bihar 390-46 390-6 3* 396 6 Caption of Col. 6
I95I-52 1951-55 33 39<* 8 U ttar Pradesh 468-8 468-8* 35 397 7
Himachal Pradesh 37-5 35-7 » >3
397 39?
5 G rand T otal F oot-n ote
2387-1 2287-1 Insert footrote: *Does not in clude an ex penditure
of Rs. 8 • 39 crores in curred during 1951-56 on O r ta. n and
Rural W ater Supply 2nd Sanitation Schemes.
33 39« 3 Andhra 14 -s 18 -8 )J 399 8 Delhi 55-0 , , 33 399 9 33
55-0 55 399 9 T otal : P a rt ‘C ’ States 67-0 55-0 33 405 8
Saurashtra 15-6 15-5 33 4O6 8 Total: Other Territories 05 0-5 35
40% 9 I. Centre 4981-9 4891-9
Annexure III 410 10 Animal Husbandry 109-9 1098-9 *5 41E 8 M ajor
Irrigatirn & l ower
Projects 34415-2 34415-9
ii
i
^anexure III >9 99 M » >5 >> 99 99 99 99 99 99 99
99 99 99 99
2 3 4
4 i i 3 T r a n s p o r t
4 1 1 6 ))
413 3 E d u c a tio n
4*3 8 99 415 9 W e lfa re o f B a c k w a rd
4TS 8 G r a n d T o t a l
417 5 R o a d s
417 5 T r a n s p o r t
41 7 7 S o c ia l S e r v ic e s
418 10 A g r ic u ltu re
4 19 3 S o c ia l S e rv ic e s
4 19 2 G r a n d ’t ’o ta i
419 3 G r a n d T o t a l
4 2 1 4 E d u c a tio n
427 S. Irr ig a tio n P r o je c ts
427 5 P o w e r P r o je c ts
427 ? C o tta g e I n d u s tr ie s
427 5 In d u s try
427 8 >>
4# 4 P u b lic H e a lth
429 8 M e d ic a l
429 429
8 S o cia l S e rv ice s
F o o t-n o te
430 7 I r r ig a t io n P r o je c ts
431 5 M a jo r I r r ig a t io n & P r o je c ts
43i 7 E d u c a tio n
431 8 99
431 10 99
4 3 1 9 P u b lic H e a lth
431 10 99
43i 0 S o c ia l S e rv ice s
5 «
7893-3 7 8 5 9 - 3
4 1 8 4 1 * 8
8 6 1 - 4 2 6 1 - 4
C la sses 5 0 9 -0 5 0 9 -6
2 0 5 - 7 2 1 0 5 * 7
1 6 5 - 2 1 8 5 - 2
1 6 5 - 2 1.8 5 -2
7 2 1 - 7 727-7 7 4 8 * 4 1 7 4 8 - 4
3136-7 1 2 3 6 -7
2 2 5 - 8 2 2 5 0 -8
2 8 4 * 4 1 4 - 6
2 8 4 4 - 2
1 8 4 - 4
9 6 :8 96-3 1 6 8 - 9 * 6 3 - 9 2 6 - 4 36-4 3-8 S - 8
151® 45-9 1 2 - 8 1 8 -8
2*9 3*9 4 6 8 -8 4 6 8 -8 * *
2 70 2 *0 3 7 0 2 - 4
I n s e r t fo o t-in o te *!*X)oes m ot ia j
e lu d e a n e x p e n d itu r e (4 M s. 8 -3 9 c r o r d in c u r
r e d d u rin i 1 9 5 1 - 5 6 o n u a b a n a n d R u r a
W a t e r SuppM .a n d S a n ita tio n S c h e m e s .
374*21 374
P o w e r 2 6 3 * 9 253-9
4 1 1 - 9 1 4 1 1 - 9
1 4 2 * 7 1 1 4 2 * 7
3 0 4 * 7 3210-2 5 18 .6 S 259- I
1 2 1 0 - 2 304-7 1359** 5 ^ 8 -6
2555*7 2554-7
JVnnex- II I ure
4 3 1 6, 7 & 8 Miscellaneous 31-9; io o -o ;. .
431 10
6 7 8
4 9
lopment Irrigation Projects Major Irrigation & Power
Projects Transport Public Health Grand T o ta l Forests Cottage
Industries
Roads Public Health Major Irrigation & Power
Projects
462-0
553-3
437 3 Public Health • •
•*9 439
99 439 10 Medical & Public Health 226- 3
99 439 » y * *
99 439 4 >9 42-1
99 ♦39 9 Grand Total Illegib
99 *39 Foot-note
A Grand Total 2686-
68-1; 3 1 -9 ; ioo-o respec tively. Insert * Insert foot-note:
*Five year pro vision for Scar city Areas Pro gramme is in
eluded under various heads of develop ment.
145-4 7-8 268-0
19-3 1984-0
68-7 18-6
2-3 69-3 Delete marginal note after Col. 10 191-8 191- 8 23- 6 36-5
226-3* Delete marginal note after Col. 10. Social 52-1 814-6 Insert
foot-note: ♦Does not include R. W. Supply.
II- 6 1 682- 2
2586-5
as
99
iv
I 2 3 4 5 6
mexure III 445 4 Roads 511-9 5*- 9. 99 446 7 Animal Husbandry 9 .9
9-8 » 446 7 Forests 6-8 6 -9
447 7 Transport 119-3 n o - 3 447 8 99 235-7 255-7
i? 447 1 Social Services Social Ser vice
Social Services
"** 449 449
year years Delete the word ‘and financial. . Ajmer Govern
ment’
» 451 4 Major Irrigation & Power Projects
3 3 3 -o
) #51 5 99 3 0 3 .3
99 455 9 Road Transport • • 216* 0 M 455 9 Transport 25‘ 0 241-0
>9 455 10 Medical 8 9 9 89-4 ) ) 456 Col. Nos. 6 & 7 7 an d
6 6 and 7
)) 456 6 Animal Husbandry 43-5 3 * 5 » 456 8 Rural Development 44 4
-4 » 456 9 99 4 -§ . . . 99 437 6 Education 20* 7 25-7
457 7 99 28-0 18-0 457 6 Medical 30-7 S3 -7 457 7 99 30-7 3 5
7
»» 157 6 Social Services 5 « -4 59-4 MS7 7 53-3 5S 7
** :457 5 Grand Total H 5-4 rf°5*4
l i f t
457 7 99 27* 0 217 ? # 7; Foot-note Include Included 459 6, 7 &
8 - Medical & Public^Health F'igures show>
againsv. Publf Health to b treated its com: mon to Medicf- and
Public Healts
33 463 8 Social Services 38-7 51-0 3 5 463 9 99 51-0 38-7 3 S
s i
465 466
» 466 10 Miscellaneous 328-8 382-8
M 467 2 Agriculture & Rural Deve lopment
5-5 5-3
REVIEW OF THE FIRST FIVE YEAR PLAN S U M M A R Y O F C O N T E N T
S
In tr o du ction Page
I. E co n o m ic T rends an d A c h i e v e m e n t s
........................................ i
II. P la n O u tla y and its F i n a n c i n g
........................................ .......... 18
IH . Programme for A g r i c u l t u r e
.................................................. 87
IV . Com m unity P rojects and th e N a tio n a l Extension Service
. 108
V . D evelopment o f C ooperation . . • • • 118
V I. A n im a l H usbandry and F is h e r ie s
................................................. 127
V II. Forests and So il Co n s e r v a t i o n
......................................................... 134
V III. Irrigation and Power ................
.......................................... 142
IX . In d u stry and M i n e r a l s
............................................................
180
X . V illage and Sm a l l In d u s t r ie s
....................................................... 212
X I. T ransport and C o m m u n i c a t i o n s
................................................. 229
X I I . Ed u c a t i o n
........................................................................................................
249
X III . S cie n tific and T e c h n o lo g ic a l R
esearch...................................... 262
& I V . H e a l t h
...............................................
...........................................................
272
x v . H ousing .
......................................................................
283
StVI. W e lfa re o f Backw ard Classes and o th er S o cia l
Services 269
X V II . A dm inistration and P u b lic Cooperation . . . .
305
X V III . Progress o f Land R e f o r m
...........................................................
314
A n n e x u r e s
........................................................................................
333
I n d e x
......................................................................................................................
471
C O N T E N T S
Intro du ction Pact
C hapter I E co n o m ic T rends and A chievements . . . . i
Objectives and A p p r o a c h
....................................................... I
Production T r e n d s
..................................................................
4 Economic Overheads
...................................................................
6 Social S e rv ic e s
..................................................................
........... 7 National Income . . . . . . . 7
Investment and O u t p u t
....................................................... 9 Monetary
Indicators and P r i c e s
............................................. io Structural and
Policy A s p e c t s .............................................
11 Achievements of targets of Production and Development
over the Period of the First Five Year Plan . . 14
C hapter II Pla n O u tlay and its F i n a n c i n g
........................................ 18
Plan O u t l a y
..............................................................................
18 Financing of the P l a n
........................................................ 23 The Tax
E f f o r t s
..................................................................
24 Public Borrowings
........................................................, . 28
Small Savings . . . . . . . . 29 Other Capital Receipts . . . . . .
29 External Assistance . . . . . . . 23 Deficit F i n a n c i n g
..................................................................
33 Mobilisation of Resources : an Assessment . . > . 35
C hapter III Programme for A griculture
........................................ 87
Agricultural Programmes
........................................................ 88 Minor
Irrigation W o r k s
....................................................... 88
Fertilizers and Manures
........................................................ 92
Improved S e e d s
...................................................................
93 Land Reclamation and Development . . . . . 96 Other Agricultural
Programmes . . . . . 97 Development of H o r t i c u l t u r e
............................................. 97 Trends in
Agricultural Production . . . . 98 Tea, Coffee and R u b b e r
........................................................ I0*
Agricultural P r i c e s
........................................................ • IOI
Agricultural E d u c a t i o n
........................................................ 102
Agricultural Research . . • » • • 102
C hapter IV C om m u n ity Projects and the N atio n al Extension
Service 108
C hapter V D evelopment of C oo peratio n ’ • • • • 118
Agricultural C r e d i t
..................................................................
119 Cooperative Marketing and Distribution • • • 122 Urban C oop
eratives...................................................................
123 Industrial Cooperatives . . . • • • 123 Training and
Administration . . . • 125 Rurfd Credit S u r v e y
..................................................................
126 -
Pagb
iapter V I A n im a l H usbandry and F isheries . . . . 127
Animal H u s b a n d r y
............................................................
127
F ish e rie s
.................................................................................
131
iapter V II F orests a n d So il C o n s e r v a t i o n
........................................ 134
Forests . . . . . . . . . 134
Soil Conservation . . . . . . . 138
hapter V III Ir rigation a n d Po w e r
.................................................. 142
Multi-purpose and N ew Major Projects . . . 145
Irrigation P r o j e c t s
............................................................
148
Power Projects
............................................................
158
Flood Control
............................................................
164
GenerM . . . ..................................................
165
iapter I X Indu stry a n d M i n e r a l s
.................................................... 180
' Industrial Development during the First Five Year Plan .
180
Industrial Development in 1955-56 . . . . 184
Development in the Public S e c to r
........................................ 184
Action on Projects proposed for Development under the Second Five
Year P l a n ..................................................
186
National Industrial Development Corporation . . 188
Development in the Private Sector . . . . 189
Investment in the Private Sector . . . . 190
Development o f Mineral Resources . . . . 192
ia pter X V illage a n d Sm a ll In d u s t r i e s
.......................................... 212
' State Programmes . . . . . . . 21 j
Handloom . . . . . . . . 216
K h a d i
................................................................................
217
Village I n d u s t r i e s
............................................................
218
Small Scale I n d u s t r i e s
.................................................. 222
Handicrafts . . . . . . . . 226
C o i r
...........................................................................................
‘ 228
Village and Small Scale Industries (Second Five Year Plan)
Committee . . . . . . . . 228
Iapter: X I T ransport a n d C o m m u nicatio ns . . . . .
229
! R a i l w a y s
.......................................................................................
230
Roads .
............................................................. .
235
S h i p p i n g
......................................................................
.......... 239
Ports and H a r b o u r s
.................................................. - 240
Inland Water Transport . . . . . . 242
Civil Air T r a n s p o r t
........................................ .......... . 243
C o m m u n i c a t i o n s
.............................................................
244
Broadcasting . . . . . . . • 245
C hapter X II E ducation
..............................................................................
249 Elementary
Education...................................................................
251 Basic E d u c a t i o n
....................................................................
253 Secondary
Education....................................................................
254 University Education . . . . . . 255 Technical and Vocational
Education . . . . 256 Social Education and Literacy . . . . . 258
Teachers . . . . . . . . . 25^ Progress in Rural A r e a s
........................................................ 259 Girls
E d u c a t io n
.............................................................................
260 Education of Handicapped Persons . . . . 260' Other Development
S c h e m e s .............................................
260-
C hapter X III Scientific and T echnological Research . . . 262
National Laboratories . . . . . . 262; Research Institutes and
Associations . . . . 265. Research in Universities . . . . . 266-
The Indian Institute of Technology, Kharagpur . . 267 Indian
Institute of Science, Bangalore . . . . . 267 Department of Atomic
Epergy . . . . . 26S Research in Indian Railways . . . . . 26 >
Telecommunication Research . . . . . 269 Meteorological Research .
. . . . . 270
C hapter X IV H e a l t h
..................................................................................
272:
Water Supply and Sanitation . . . . . 273. Control of Communicable
Diseases . . . . 274 Indigenous and other systems of Medicines . .
277 Medical Education and Research . . . . 27$ Drug Production . .
. . . . . 279- Family Planning . . . . . . . 280
C hapter X V H o u s i n g
.........................................................................................
283. Low Income Group Housing . . . . . 283, Subsidised Industrial
Housing Scheme . . . 285 Rural Housing . . . . . . . . 287 Housing
Research . . . . . . . 288
C hapter XVI W elfare of Backward C lasses and other Social
Se r v i c e s
.................................................................................
289
Backward Classes and Social Welfare Services . . 289 Social Welfare
•........................................................
........... . 294. Labour Policy and Welfare . . . . . 295;
Prohibition . . . . . . . . 297 Rehabilitation of displaced persons
. . . . 29S
C hapter XVII A d m in istr a tio n a n d P u blic C ooperation . .
. 305 Integrity in Administration . . . . . . 305, Economy
..............................................................................
306. Efficiency . . . . . . . . 307 District Administration . . . .
. . 309 Village Panchayats . . . . . . . 310.
Pag®
Planning Machinery
....................................................................
311 Statistics, Research and Evaluation . . . . 311 Public
Cooperation and Participation . . . . 311
C hapter X V III Progress of L and R eform . . . . 314 Abolition of
In te r m e d ia r ie s
............................................. 314 Security of
Tenure .........................................................
318 Regulation of Rents
....................................................................
320 Ownership Rights for Tenants . . . • • 321 Ceiling on H o l d i
n g s
....................................................................
323 Consolidation of H o ld i n g s
........................................................ 326
Cooperative F a r m i n g
........................................................ 327
Resettlement of Landless Agricultural Workers on Land . 328
iv
A tfN E X U R E S
I. P rogress o f D evelopm ent E x p e n d it u r e
............................................. 333 (1) Centre and
States...............................................................................
333 (Vi) Central Government
....................................................................
336
(iii) States . .
...............................................................................
340
II. Progress o f D evelopm ent Expenditure : Hbads o f D e ve lo p
, m bnt
........................................................................................
343
IM . Pro iRbss o f B etblopm ent E xjpindituri : Statbs . . .
410
IN D E X
INTRODUCTION
Since the commencement of the First Five Year Plan the Planning
Commission has published a series of progress reports on the
working o f the Plan. The first progress report related to 1951-52
and 1952-53. This was followed by a review of the working of the
Plan during its first two years and a half ending September, 1953.
Three further progress reports were published. These were for the
year 1953-54, for the six months April— September 1954, and for the
year 1954-55.
A year ago, in presenting the progress report for .1954-55, I said
: “After the Second Five Year Plan has been approved, the
Planning Commission hopes to undertake a careful assessment of the
working of the First Five Year Plan as a whole. Such a study over a
period of five years will be of value in placing the experience
which has been gained during the past five years in the correct
perspective and will assist the Central and State Gov ernments in
ensuring greater efficiency and securing an even larger measure of
public cooperation and partici pation in the implementation of the
Second Five Year Plan.”
This volume attempts an appraisal of the First Five Year Plan as a
whole and also includes the Progress Report for the last year of
the Plan. In this Review the Planning Commission has endeavoured to
make as objective an appraisement as possible of the execution of
development programmes in different sectors and to present a
balanced account of the results achieved. It is hoped that the
Review will assist all concerned in taking such action as may be
necessary for ensuring the fulfilment of programmes included in the
Second Five Year Plan.
In the preparation of the present report the Pianmag Commission
encountered one difficulty. Owing to the reorganisation of States
in November 1956, it has not been possible yet to obtain figures of
actual expenditure for States whose territories were reorganised.
The figures of expenditure cited for the year 1955-56 are taken
mainly from the revised estimates. The estimates of actual outlay
during the last year ©f the Plan are therefore necessarily
approximate.
V. T. KRISHNAMACHARI, Deputy Chairman,
Planning Commission. May 30, 1957.
C H A P T E R I
I t is proposed to attempt in this chapter an appraisal of the
over all economic trends and achievements over the plan period
against the objectives and targets defined in the P la n
O b j e c t iv e s and A ppr o a c h
2. The first five year plan had a two-fold objective. Firstly, it
aimed at correcting the disequilibrium in the economy caused by the
War and the partition of the country. Secondly, it proposed to
initiate simultaneously a process of all-round balanced development
which would ensure a rising national income and a steady improve
ment in living standards over.a period. While the investment pat
tern envisaged in the plan was worked out with due regard to the
immediate objective and the resources immediately in sight, the
approach to the problems of mobilisation and deployment of re
sources was formulated in the light of the long-term objective. It
was also emphasised that the aim was not merely to plan within the
existing socio-economic framework but to change this frame work
progressively and by democratic methods in keeping with the larger
ends of policy enunciated in the Constitution. The first fhte year
plan was thus a step in a new direction, a step which involved
greater direct responsibility for the State in promoting develop
ment and a greater degree of coordination of developmental activity
in all economic sectors and at all levels.
3. The economic situation at the commencement of the plan was far
from favourable to any marked stepping up of investment. There were
acute shortages of food and raw materials. Industrial production
was below capacity levels. The transport system had been severely
run down. The rehabilitation of large numbers of displaced persons
coming over from across the border was a special problem with
social, psychological as well as economic implications- The
outbreak of the Korean war in June 1950 and an unusually bad crop
in 1950-51 had aggravated the situation. In 1951, the country had
to import 4- 7 million tons of foodgrains. There were inflationary
pressures within the economy; the index of wholesale prices at the
end of March 1951 was 450 (1939=100). The balance of payments in
1951-52 showed a deficit of Rs. 163 crores on current account.
Various developmental projects which had been com menced in the
post-war period were faced with financial difficulties. There was
little coordination, inter se, between the developmental 20 P.
c.
ECONOMIC TRENDS AND ACHIEVEMENTS
2 R e v i e w o f t iie F i r s t F iv e Y e a h P l a n
programmes of the Centre and of the States, and the administra
tive machinery in some of the newly constituted States was in
adequate even for its normal tasks.
4. The first five year plan, therefore, endeavoured, first of all,
to present a coordinated view of the requirements .of the economy
and of the resources available. In the light of this, it worked out
a scheme of priorities m terms of which to proceed further with a
view to restoring balance to the economy and of laying simulta
neously the foundations of orderly development. To an -extent. tHc
plan was an attempt to synthesise and coordinate the development
programmes that had already been initiated. But, it would be wrong
to minimise the significance of the enunciation of the wider
objectives and approaches and of the focussing of public attention
on the problems of development as such. Each item of the develop
ment programme was viewed as an element in a wider scheme, and new
items of work were taken up, some with a view to immediate results;
others from more long-range considerations. The first five year
plan became, in other words, the starting point of a new and
meaningful phase in policy formulation, programming and imple
mentation. and governmental action came to be viewed more and more
as an aspect of the community’s endeavour to attain defined
objectives along lines which, in the circumstances, looked most
promising.
5. The following table showb the projected and actual allocation of
plan outlay by major heads over the five year period: —
Allocations and Outlay under the First Five Year Plan by Major
Heads of Development
Total Plan Provision (including adjustments ) Outlay 1951-56
Ks. crores Per cent • Rs. crores Per cent
I. Agriculture and Community Development 3S4 14-9 299 14-8 (i)
Agricultural Programmes 249 xo-5 227 I I ’ 3 (ii) Community
Projects and National
Extension Service 90 3.8 57 2.8 ' {Hi) Local Development Works 15
o-6 15 0-7
2. Irrigation and Power . • . 647 2 7 - 2 385 2 9 ' I
(i) Multipurpose projects 256 io-8 241 12-0
(it) Irrigation projects 213 9-0 191 9-5 (iii) Power projects 178
7-4 153 7 -fr
$. Industries and Mining 1 8 8 7 . 9 100 5-0 (i) Village and
small-scale industries . 49 2- I 44 2.2; (if* Large-scale
industries, m ining and
scientific research 139 5-8 56 2-8
ECONOMIC TRENDS AND ACHIEVEMENTS 3
Total Plan Provision (including adjustments) Outlay 1951-56
Rs. crOres Per cent Rs. crorcs Per cent
4 - Transport and Communications 571 24-0 532 26-4 (i) Railways . .
. . . 267 11*2 267 13-3 (ii) Roads and Road Transport 147 6-2 147 7
'3 (iii) Ports and Harbours, Shipping and
other Transport 97 4 ' i 7 i 3 '5 (iv) Posts & Telegraphs,
Communica
tions and Broadcasting 60 2-5 47 2-3 5. Social Services . . . . .
532 22-4 423 21-0
(t) Education . . 170 7-2 153 7 -6 (ii) Health . . . . . 138 5-8
ror 5- 0 (iii) Housing . . . . 49 2- I 35 1- 7 (iv) Labour and
Labour Welfare and
Welfare o f Backward Classes 39 1-6 37 1-8 (v) Rehabilitation 136 5
'7 97 4-8
6. Miscellaneous . . . . 86 3 6 74 3 7
G r a n d T o tal 2,378 100-0 2,013* 100-0
'‘Fig Jres fx- th : fifth year ire b i i t i 01 ‘ revised
estimates’ . Actual outlay over the Hve year period is estimated at
Rs. 1,969 crores.
Despite the shortfalls in expenditure that have occurred under
almost all heads, it must be emphasized that public developmental
expenditures have been stepped up to remarkably high levels and
that in several vital fields like irrigation and power,
agricultural improvement, railways and roads, the progress recorded
is impres sive.
6. The targets of production and other development works enunciated
in the Plan have to be related not only to the outlays in the
public sector but also to the implementation of certain pro
grammes, in the private sector. An attempt was made in the plan to
put' together the programmes of development in the organised
industrial sector and to assess their impact. The plan indicated
for this sector an order of priorities and prescribed the framework
of policy within which the relevant programmes were to proceed. The
total capital, investment required for industrial expansion in the
private sector was estimated at Rs. 233 crores, the bulk of this
investment being intended for capital goods and producer goods
industries. Available data indicate that the progress of investment
in the private sector has been up to the initial expectations. In
vestment in this sector as in the public sector was low in the
earlier years but it picked up towards the latter part of the plan
period The rate of investment in organised industries averaged Rs.
26 crores a year for the first two years; in the third year it
increased to Rs. 44 crores, in the fourth year to Rs. 50 crores,
and in the fifth
4 REVIEW OF THE FIRST FIVE YEAR PLAN
year to around Rs. 85 crores. The results of the plan in the indus
trial field were highly satisfactory not merely in terms of the
utili sation of capacity already in existence at the commencement
of the plan but also in terms of the new capacity installed'in new
and important lines. The progress of modernisation and replacement
of plant and machinery appears, on the other hand, to have been
slower than was expected, the expenditure on this account being
estimated at Rs. 110 crores as compared to the plan estimate cf Rs.
150 crores.
P r o d u c t io n T ren ds
7. Judged in relation to its immediate objectives the achieve
ments of the first plan were encouraging. The following table shows
the levels of production in important lines at the beginning and a+
the end of the plan period: Levels of Production in Selected Lines
of Activity: 1950-51 and
1955-56
1951-56
[ . Agricultural Production (i) Foodgrains (million tons) . . . .
50-0 64-8 29 -6
(ii) Cotton (Lakh bales) . . • • • 29-1 40*0 37-5 32*8 42-0
28-0
(iv) Sugarcane (in terms of gur—lakh tons) . . 56-2 58-6 4 -3
(») Oilseeds (lakh tons) . . . . 50-8 56-6 I I .4
(vi) Tobacco (lakh tons) . . . . 2-57 2-59 0- 8
(vii) Tea (million lbs.) . . . . . 607 668 10-5
(tint) Potatoes (thousand tons) . . . • 1634 1839 12-5
Industrial Production (*) Finished steel (thousand tons) . • • 976
X274 30-5
(ii) Pig iron (thousand tons) . . . • 1572 1787 13-7
(iii) Cement (thousand tons) . . • . 2689 4592 7 0 -8
(iv) Fertilizers : 756-5(a) Ammonium Sulphate (thousand tons) • 46
394
(6) Superphosphate (thousand tons) • • -55 71 2^ ’ 1 (v)
Locomotives (Nos.) . . . . 3 179
133-5(vi) Machine Tools—graded (value in Rs. lakhs) . 33 ‘ 64
78-54
(vii) Diesel Engines (Nos.) • • • 5536 10369 87-3
(viii) Automobiles (Nos.) . . . . 16519 25272 53-0
(**) Cables and W ires-A .C .S .R . Conductors (Tons) 1349 9730
547-1
(x) Aluminium ( T o n s )
............................................ 3677 7333 99 .4
(xi) Cotton Manufactures 1633(a) Yarn (million l b s . )
............................................ H 7* 39-0
(b) Mill Cloth (million yds.) . . . 3718 5102 - 37-2
(c) Handloom cloth (million yds.) . • • SlQ 1449 79-0
ECONOMIC TRENDS AND ACHIEVEMENTS 5
1950-51 1955-56 Percentage increase
1951-5*
(.m) Jute manufactures (thousand tons) . 824 1054 28-0 (xiii)
Bicycles (thousands) . . . . IOI 513 407-9 (xiv) Sewing Machines
(thousands) . . . 33 I I I 236-3 (xv) Electric Lamps (thousands) .
. . J 5,000 24,238 6 l-o . (xvi) Power Alcohol (million gallons) .
. 5-0 io*4 108-0 (xvii) Sugar (thousand tons) . . . 1064 1701 59-9
(xviii) Vanaspati (thousand tons) . . 153 276 80-4 ( x ix ) Paper
and paper boards (thousand tpns) . 1 1 4 187 64-0 xx) Leather
footwear (thousand pairs) . . ' 5195 5665 9 0
(Western and indigenous types)
In appendix I at the end of this chapter is given a more detailed
statement of the increases in production and in the levels of deve
lopment in important lines as compared to the targets set forth in
the plan.
8. Agricultural production showed striking improvement over the
plan period. The output of foodgrains in 1955-56 at 64-8 mil lion
tons was about 3 million tons above the target laid down in the
plan. The turning point came in 1953-54 with a peak produc tion of
68 8 millon tons of foodgrains. This was followed by ano ther good
crop in 1954-55 when the foodgrains output was 60-6 million tons.
The output of cotton, jute and oilseeds also recorded substantial
increases, although there were, as is to be expected, variations
from year to year. The index of agricultural production
(1949-50=100) rose from 95*6 in 1950-51 to 114-3 in 1953-54 and
116-4 in 1954-55. In 1955-56, however, it recorded some decline.
Altogether, the index of agricultural production by the end of th»
plan period was about 19 per cent higher than at the beginning of
the plan.
9. Industrial production also increased steadily, the increase over
the five year period being of the order of 40 per cent. Produc
tion of mill-made cloth increased from 3718 million yards in
1950-51 to 5102 million yards in 1955-56. The plan target was
exceeded by about 400 million yards. In the case of sugar, sewing
maohi’no^ paper and paper-board and bicycles production reached the
antici pated levels; in fact in some cases the targets were
surpassed. Cement production rose from 2-7 million tons in 1950-51
to 4-6 million tons in 1955-56, and the general engineering
industries a3 well as heavy chemicals and chemical products
recorded sizeable increases in output. The larger availability of
raw materials, the utilisation of capacity hitherto un-utilised as
well as fresh invest ment on a significant scale contributed to
the general increase in
6 REVIEW OF THE FIRST FIVE *YEAR PLAN
industrial output. Several new products were manufactured in the
country for the first time and a' number of new and important in
dustries like petroleum refining, ship building, manufacture of
air crafts, railway wagcns, penicillin, ammonium chloride, and DDT
were established. In the public sector various industrial units
such as the Sindri Fertiliser Factory, the Chittaranjan Locomotive.
Works, the Indian Telephone Industries and the Integral Coacfo
Factory recorded satisfactory progress. On the other hand, the
projected iron and steel plant and the heavy electrical equipment
plant could not be commenced in the plan period. The Machine Tool
Factory, the Nepa Newsprint Factory and Bihar Superphosphate
Factory were also behind schedule.
E c o n o m ic O verh eads
10. More significant than the increases in agricultural and indus
trial production mentioned above is the advance made in streng
thening the economic overheads on the basis of which further ex
pansion could be undertaken. During the plan period, 16-3 million
acres of land were to be brought under irrigation, some 6-3
million- acres from major and medium irrigation works and 10
million acres from minor works. Capacity for power generation has
been increased from 2-3 million kWs to 3-4 million kWs. The railway
system has been considerably strengthened. As against the plan'
provision for procurement of 1038 locomotives, 5674 coaches and'
49,143 wagons, actual receipts over the five years were 1586 loco
motives, 4758 coadhes and 6L257 wagons. These were supplemented by
an increase in indigenous production—of locomotives from 27 in
1951-52 to 179 in 1955-56, of wagons from 3707 to 14,317 and of
coaches from 673 to 1221. Some 430 miles of lines dismantled dur
ing the War were restored, 380 miles of new lines constructed and
4o miles of narrow gauge lines converted into meter gauge. The,
pro gramme for road construction and road transport was also im
plemented almost completely.
11. The outlay on economic overheads provided for in the plan, was
no more than enough to sustain the level of economic activity
expected by the end of the plan period. The limitations of resour
ces did not permit a building up of these overheads in advance ot
the emergence of demand. The outlay incurred in the plan periodi on
most of these items ..was fairly close to the initial targets and,
the results achieved in physical terms were about 85 to 90 per cent
of those envisaged in the plan. Nevertheless, it must be emphasis
ed that .the irutial provisions themselves were small relatively
to- the needs of a growing economy. The railway programme was,
in-
the main, a rehabilitation programme. The development of power was
also just sufficient to meet the increasing demand. The first plan
paid little attention to the development of mineral resources, and
in regard to ports and shipping there was a considerable short
fall in outlay, as compared to the initial provisions small as they
were.
S o c ia l S ervices
12. There has been in the plan period a considerable enlarge ment
of social services. In 1950-51 the number of children in pri mary
schools was 18.7 million; by 1955-56 it had increased to 24.8
million—an increase of about 33 per cent.. The percentage of
children in the age-group 6-11 attending schools was 42 in 1950-51;
it increased to 51 in 1955-56. In the age-group 11-14, the
correspon ding percentage increased from 13 9 to 19-2. For meeting
the requirements of trained personnel a number of technical
institu tions were started in the plan period- The number of
persons gra duating from engineering and technological
institutions rose during the plan period from 2200 to 3700 arid of
those taking diplomas from 2700 to 4000. Besides, over 14,000
village level workers receiv ed training in basic agriculture,
cooperation and allied activities in connection with the
organisation and expansion of the commu nity projects and national
extension work. Training centres were also established for group
level workers and these turned out some 1850 supervisory personnel.
Training facilities were also established for various small-scale
and cottage industries. On the side of health programmes, while the
increase in the number of hospital and dis pensaries was moderate,
a large-scale programme of control of malaria and filaria was
executed.
N a t io n a l I n c o m e
13. The overall results of the plan are brought together in the
following table showing increases in national income in the aggre
gate and by major sectors:
ECONOMIC TRENDS AND ACHIEVEMENTS 7
Net National Output at 1948-49 prices In Rs. abja*
1950-51 iv ? 2-53 1953-54 1954-55
Percentage increase
I 2 3 4 5 6 7 8
I. Agriculture, animal husbandry and ancil lary activities . .
43-4 4 4 -4 46-0 . °
1 00 50 >3 49.8 14*7
2. Mining, man.ufaot'Jiing and small enterprises . 14-8 15-2 15*8
16-5 I 7 *t> I 7 '5 le -2
*abja= loo crores. ** Preliminary.
8 REVIEW OF THE FIRST FIVE YEAR PLAN
p 2 3 4 6 6 7 8
3. Comnso! cv;, irar. spoi t & e x a m licitions . l6*6 17-3
17-9 18-3 X9 -I 1 0 7 I 8 - &
4. Other services . . 13-9 14-3 15-0 15-7 1 6 4 17-2 23 -7 5. Net
dome;lie product
at factor cost . .
0000 91-2 94-7 100*3 102*8 104*2 17*5 6. Per capita net output
246-3 250-1 256-6 268-7 271-9 272-1 10-5 7. Population in crores .
35-932 36-335 36-867 37-328 3 7 '808 38*300 6-6
14. Over the five years of the plan national income increased by
about 17-5 per cent. The net output of agriculture and ancil lary
fields showed an increase of 14-7 per cent; of mining, manufac
tures and small enterprises an increase of 18-2 per cent . The
increase in commerce, transport and communications was 18-6 per
cent and that in other services 23-7 per cent. The net output of
agriculture was highest in 1954-55, though the increase from the
previous year was nominal. The other sectors have, ^n the
other
hand, registered a steady increase. Undoubtedly,, the advance in ;
large-scale industries was more rapid than in perhaps any quinque
nnium earlier, but their total impact on the aggregate
national
product cannot but be small because of the preponderance of agri
culture in the economy. While the rate of increase of national
income has on the whole been satisfactory, it has not taken place
at a steady pace. It will be noticed that there was a large
increase in 1953-54 and 1954-55 as a result mainly of the increase
in agricul tural output. As much as 13 per cent of the increase in
national income was thus registered by the end of the third year;
in the two subsequent years, the rate of increase diminished and in
fact in
' 1955-56 the increase was nominal. Per capita incomes over the
plan recorded an increase of 10-5 per cent. By the end of the
plan
; period! the per capita levels of consumption had probably
increased I by no more than 8 per cent. In fact, considering the
large step-up ' in developmental outlays and in investment in the
last two years i of the plan, it is likely that the level of
consumption since 1953-54 in per capita terms has shown hardly any
rise. The consumption of cereals per adult per day went up from
12*6 ounces in 1950-51 to 14-4 ounces in 1955-56, and of cloth from
9:7 yards per head in 1950-51
| (which was exceptionally low) to 16-4 yards in 1955-56; and of
sugar i from O’ 37 ounces per head in 1950-51 to 0-57 ounces in
1955-56. There I have been significant increases in the consumption
of industrial pro ducts like hurricane lanterns, bieycles, sewing
machines, electric lamps, radio receivers etc.
ECONOMIC TRENDS AND ACHIEVEMENTS 9 I n v e s t m e n t a n d O u t
p u t
15. The plan envisaged an increase of investment from a level of 5
per cent to about 7 per cent of national income, the target for
aggregate investment over the five years being Rs. 3,500—3,600
crores. Investment in the public sector . aggregated to about Rs.
1,500 crores, while investment in the private sector was close to
Rs. 1,600 crores—a total of Rs. 3,100 crores over the five year
period. The level of investment in the economy by the end of the
plan period was about double the level in 1950-51. Mention may be
made here of the fact that the level of development expenditure in
the first two years of the plan was low, and that it was stepped up
as from the third year, the Step-up being particularly large in the
last two years, which accounted for almost two-thirds of the actual
outlay over the five year period. This pattern of the growth of
public development expenditure vjas reflected in the pattern of
investment. More than 50 per cent of the investment in the public
sector materialised in the last two years. Private investment also
rose substantially in these years. There were thus two distinct
phases in the plan. The first phase in which, apart from the accu
mulation of inventories in 1951-52 the level of investment, public
as well as private, was relatively low, and the second phase in
which it rose markedly. The fact that the large increase in out
put occurred around 1953-54 and the rate of increase slowed down
thereafter accounts for the upward pressure on prices in the final
stages of the plan.
16. Since the increase of national output as a whole slowed down in
the latter part of the plan at a time when investment was in
creasing steadily, no direct relationship between aggregate invest
ment and the rise in aggregate output for the plan period as a
whole can be established. To an extent, the increase in
agricultural out put in 1953 and 1954 is attributable to good
monsoons. It is, never theless, true that the quinquennial average
of agricultural yields over the plan period was higher than in the
previous period. National income cannot but show fluctuations from
year to year in an economy which has a large agricultural sector
depending on monsoons, and a fairly long period of steady
investment is necessary before the results expected materialise
fully and a clear pattern of investment-output relationship emerges
for the economy. It must also be mentioned that the sectoral data
on national income are by no means complete or fully reliable. It
is certain too that the results of some of the investments made in
the plan period will accrue in later years because of the usual
time-lag between investments and the realisation of output. It is
now clear that some of the increases in output which occurred
during the period of the plan were rather fortuitous, and that it
will be some time after the base of the
10 REVIEW OF THE FIRST FIVE YEAR PLAN
economy has been strengthened at several points that a process or
stable and assured growth can be said to have been initiated. All.
this indicates that the progress recorded in the first plan
period,, significant as it was both for its direct as well as
indirect benefits, was in reality the beginning of an expansionary
phase rather than, a completed phase in itself.
17. The phasing of investment in the plan period also explains the
unfavourable trend in employment after the collapse of the- Korean
boom and for some time thereafter. In 1053, the employ ment
situation, especially in the urban areas, worsened noticeably. This
led to the decision to increase plan outlays by some Rs. 300 crores
over the level 'of Rs. 2,069 crores proposed earlier. While- not
all the additional programmes could be carried through fully and
the direct impact of the fresh outlays was probably not large,, the
increasing tempo of public expenditure and the high levels of
investment in the private scctor in the latter part of the plan
period cannot but have reacted favourably on employment. It is not
possible to adduce direct evidence of this in the figures
available. The total number of the unemployed registered with the
Employ ment Exchanges continued to increase throughout the plan
period from a level 337,000 at the end of March 1951 to 705,000 at
the end of March 1956. However, the Employment Exchange data
relate- to only a part of the urban employment market, and the
increase in registrations may only indicate greater readiness to
try out this avenue for securing employment. Studies undertaken in
the Plan ning Commission indicate that the growth of employment
opportuni ties in the plan period tended on the whole to lag
behind the in crease in the labour force. The extent of
unemployment and under employment in the economy as a whole is
thus not likely to have diminished significantly over the plan
period, as this is a problem rooted structurally in the economy.
But, there was a qualitative iniprovement in the employment
situation in the later stages of the- plan; and, indeed, in certain
sectors, increasing shortages of semi skilled and technical
personnel were felt.
M o n e t a r y I n d ic a t o r s a n d P rices
18. Over the plan period as a whole, money supply increased from
Rs. 1,979 crores to Rs. 2,184 crores, that is, by a little over 10
per cent, and prices at the end of the plan period were 13 per cent
lower than when the plan commenced. Here, again, it must be borne
in mind that there have been two broad phases. In the early part of
the plan, money supply as well as prices registered a. fall, pnd
both picked up in the latter phase as investment, public and
private increased. Thus, between March 1951 and March 19531 money
supply declined by Rs. 215 crores; there was a small increase of
Rs. 30 crores in the next twelve months; between March 1954 to-
March 1956 the increase was Rs. 390 crores. It was in this
period
ECONOMIC TRENDS AND ACHIEVEMENTS 11
that a large part of the deficit financing undertaken in the plan
period materialised, while the rate of growth of output slackened.
Prices followed “a broadly similar pattern, though with variations.
The index of wholesale prices came down from 450 in March 1951 to
378 in March 1952 as a result partly of the large import surplus
that year and partly of the disinflationary fiscal and monetary
measures taken by Government. In fact, by May 1952, the index fell
further to 367. Prices recovered thereafter and fluctuated within,
narrow limits in 1953-54. The substantial increase in agricultural
production that year exerted a further downward pressure on prices,
especially on prices of food and agricultural products, and it be
came necessary for Government for a while to take measures to sup
port th;se prices. A distinctly upward phase started as from July
1955, the rise in prices as from that date to the end of the plan
period being about 14 per cent. As is well known, prices since
then* have continued on an upward course, reflecting tha growing
pres sures of demand in the system in the face of an inadequate
increase- in supplies. On the whole, the implementation of the
development programmes in the plan-did not cause any significant
strain on the economy, mainly because of the increases in output
recorded about the middle of the plan period. But, by early 1956,
the economy was more or less fully stretched.
9 . 19. The balance of payments position over the plan period
was
far more satisfactory than was orginally expected. The rough esti
mates made in' this respect while formulating the plan indicated
the possibility, of an average annual deficit of the. order of Rs.
180—200 crores. The payments position, in fact, turned1 out to be
substan tially more favourable, the deficit of Rs. 163 crores in
1951-52 being followed by surpluses of Rs. 60 crores and Rs. 47
crores respective ly in the next two years. In 1954-55, there was
again a small sur plus of Rs. 6 crores on external account, which
increased to Rs. 15 crores in the final year of the plan. For the
five year period, the deficit totalled Rs. 30 crores, but this is
after taking credit for ‘official donations’ aggregating to Rs. 96
crores. As compared to the drawing down of Rs. 290 crores of
sterling balances envisaged in the plan, the actual drawal was Rs.
138 crores. The availability of the U.S. wheat loan in 1951-52 and
the large increases in domestic output thereafter, the abatement of
inflationary, pressures, and the low level of machinery and capital
goods imports almost until the last year of the plan contributed to
the unexpectedly stable balance of payments position in the plan
period.
. S t r u c t u r a l and P o l ic y A spects
20. While the immediate tasks proposed in the first five year plan
were summed up in the programme of investments proposed to be
undertaken by the Central and State Governments, the approach
12 REVIEW OF THE FIRST FIVE YEAR PLAN
of the plan was much wider. It was recognised that structural and
institutional changes of a far-reaching character would be
necessary if the process of development was to bring forth the
desired results not merely in terms of the increase in output but
in terms of an increase in the production potential and of the
satisfaction of vital democratic and egalitarian urges within the
community. The plan indicated various directions in which action
would be required in pursuance of this objective: the establishment
of a nation-wide national extension and community projects
movement, land reforms, the expansion and strengthening of
co-operative organisations in credit, in trade, in housing and in
certain spheres of production, reorientation of the banking and
credit structure and the establish ment of a new relationship
between the public and the private sector in the interests of
orderly growth. Significant developments have been initiated in all
these respects in the plan period, and it was with a view to
emphasising the' need for further and more rapid change in these
directions that the Parliament passed in December 1954 a resolution
adopting the socialist pattern of society as the objectives of
economic and social policy. The Industrial Policy Resolution
adopted in April 1956 consequently places larger responsibility on
the State for industrial development.
21. A word mdy be said here about the instruments and techniques
which the report on the first five year plan dealt with in some
detail. It was emphasised in that report that in the • transforma
tion of the economy in the light of the objectives and priorities
accepted the State will have to play the crucial role. During the
plan period there has been a considerable enlargement of the
responsibility of the State in the economic field. While the
responsibility for industrial development in the first plan period
was placed mainly an the private sector, the State exercised a
regulatory role and has endeavoured to encourage private invest
ment in priority lines. The role of the State as a key factor in
deve lopment has come to be fully recognised, whether the State
enters the field directly or confines itself to exercise general
control and direction. It must, however, be said that the modest
scale of invest ment in the first plan and the improvement in the
economic situation consequent on increases in both agricultural and
industrial produc tion obviated the need on the part of the State
to use the techniques of regulation and control with vigour. The
improvement in the food situation in 1953-54 made it possible to
abandon food controls and the satisfactory balance of payments
situation almost continuously since the second year of the plan
enable the investment programmes both in the public and in the
private sectors to go through without causing any significant
strain on the system. Whilie this was a welcome development in
itself, it has to be recognised that in a sense this Situation
prevented any testing out of the techniques or instruments
ECONOMIC TRENDS AND ACHIEVEMENTS 13
for planned development discussed in the report on the first plan.
It would be wrong to conclude that these techniques or instruments
are unnecessary for planning. These problems arise only when the
investment effort becomes large relatively to the resources
available and it is in such circumstances that strategic controls
at certain points in the economy to supplement the over-all
financial and monetary discipline implied in a plan of development
' can be of material assistance in overcoming transitional
difficulties.
22. Finally, the working of the plan has brought out even more
clearly than before the need for an improvement in statistical and
analytical techniques for the formulation of suitable policies and
their assessment. In retrospect, it appears that at a certain stage
in the five year period investment could, with advantage, have been
stepped up beyond the levels then current. The available data in
regard to the employment situation, the levels of investment in
various sectors of the economy and various technical determinants
of development are too inadequate for a precise assessment of the
forces operating within the system and their likely outcome. The
task of working out a set of balanced inter-related targets for the
various sectors and sub-sectors of the economy is, correspondingly,
difficult. But, of course, the development of the appropriate tools
of thinking and the evolution of suitable instruments and
techniques of planning for the various types of situations that
emerge from time to time have necessarily to be part of the process
of growth which the successive plans are intended to foster.
23. To conclude: the first five year plan was instrumental in
bringing about a marked improvement in levels of production, both
in agriculture and in industry. It also initiated a number of
struc tural and institutional changes. The plan has evoked
wide-spread public interest and enthusiasm and there is a new and
insistent urge for rapid development all over the country.
Altogether, the first plan was only an initial step. The problems
of resources mobilisa tion and of countering the shortages and
bottlenecks at various points which are associated with sustained
development effort did not emerge fully in the period of the plan.
Both from the point of view of the stepping up of investment
substantially and of keeping the various sectors of the economy
moving together in balance, the real tasks, it could be said, are
yet ahead.
APPENDIX 1
Achievements of Targets o f Production and Development over the
period of the First Five Ye
Prolusion/ Target of Production/ Develop- additional develop-
Actual Production/Development in
ment in the base year 1950-51
production/ ment expected 1951-52 I952"53 I953-54 *954-55 develop-
at the end ment of the Plan in the Plan
Achieve- ------------- ment in 1955-56 1955-56
Achieve- morit in 1955-56 as per
centage of the plan
(*) (/) (g) (h) (») O') ( i-b )
(k)
I. A gr ic u ltu r a l Pro d u c tio n
(t) Foodgrains (million tons) 54-°* 7-6 6 i-6 51-2 58-3 68-7 66-6
64-8 ] 0-9 142
(ii) Cotton (l^kh bales). 29-1 12-6 41-7 31-3 31-9 3 9 '4 42-3 40-0
10-3 82
(hi) Jute (lakh biles) . 32-8 2D-9 53-7 45-3 45-9 3 0 9 29-3 42-0
9-0 43.
(iv) Sugarcane (in terms of gur— lakh tons) 50-2 7 -0 63-2 ol -0
53-3 4 ( '0 53-0 58-6 2-4 35
(v) Oil seeds (lakh tons) 1 50-8 4-0 5 J-8 4 ) 0 47-0 53-0 62-0 5 6
6 5-6 156
11. C o m m u n ity P r o je c ts and N a tio n a l E x te n sio
n
(i) Community Development Blocks (Nos. cumulative)
(ii) N.E.S. Blocks (Nos. cumulative) .
•• •• •• 167 V
(iv) Total population served (million)
III. I r r ig a t io n a n d P ower
(i) Area irrigated (million acres) . 51-0 19 '7 7 »-7
(ii) Electrical e .i:rgy (installed capacity million kwt.) 2-3 1-3
3 -6
I n d u str ial P r o d u ctio n
(i) Finished steel (lakh tons) 9 -8 6-7 16-5 ro-8 (ii) Pig iro.i
[likh to ii) i 5 ‘ 7 12-6 23-3 17-4 (iii) Cement (lakh tons) 26-9
21*1 43-0 3-2 '9 (iv) Aluminium (’000 tons) . 3-7 8-3 I 2-0 3
9
(•v) Fertiliser :—
(a) Ammonium Sulphate (’033 tons) . 45-3 434-0 450-0 95 -o
(b) Superphosphate „ ( ’oootons) . 55-o 125-0 180-0 57-0
(vi) Laco noiives (Nbs.) 3 170 173 27
(vii) Cotton manufactures : (a) Yarn (million lbs.) M 79 461 1,640
1.333 (b) M ill cloth (million yirds) 3.718 93/ 4,700 4.134 (c)
Handloom cloth (million
yirds) . 3 l 3 3 )-> I ,7>0 933
* Base 1949 50
51,406 86,060 1,5?,J6?
65-0 34.0 71
•• 3 4 1 • 1 84
IO 'j io- 7 12-4 12-8 3-0 45 16-9 16-8 17-7 17-9 2-2 I? 35-7 4 ° '3
44 '2 45-9 I9 '0 90
3 ’ 4 3 -S 5-5 7 ‘ 3 3-6 43
252-0 307-0 365-0 394-0 347'7 86
50-0 66-0 102-0 71-0 —. 16.0 13
63 86 145 179 176 104
1,477 1,520 1,577 1.633 454 99 4,761 4,906 5,046 5,102 1,384
141
I,0D3 1,200 1,358 M 50 639 72
ECO N
O M
IC TRENDS
AND A
C H
IE V
E M
E N
APPENDIX I— contd.
Achievements of Targets of Production and Development over the
period of the First Five Year Plan
<J\
Actual Proiuction/Development in Acheire- -------------------------
ment in
Production/ Target of Production/ Develop additional develop ment
in production/ ment expected 1951-52 1952-53 1953-54 1954-55
1955-56 1955-56 the base develop- at the enl of year ment in the
the plan 1950-51 plan
Achieve ment in 1955-56
(*:
(viii) JVite Manufactures (’ooo tons) 824 376 1,203 931 910 865 971
1,054 230 61
(ix) Bicycles (’000 Nos.). 97 433 530 118 211 289 401 513 4x6
96
(x) Sewing machines (’000 Nos.) 33-0 58-54
91-5 48-0 52-0 . 68-0 8i-o III-O 78-0 133
(xt) Power alcohol (million gallons) 5-0 13-0 18 -o 6-5 8*0 9 0 8-o
10-4 5-4 41
(xit) Sugar (’000 tons) . 1,100 403 1,503 1,494 1,291 1,001 1,590
1,860 760 190
V. T ransport
(*) Shipping tonnage :
(a) Coastal (lakh G R T ) 2-2 1-05 3 25 . . 2-4 0-2 19
(6) Overseas (Do.) i '7 i -x j 2-85 1i 2-4 0 -7 61
REVIEW
Surfaced
Unsurfaced
(t) Education
(b) Number of pupils in primary schools/classes (in lakhs).
(c) Percentage of school going children aged 6— 11 .
(d) Basic schools (Nos.)
(it) Health
(b) Dispensaries and Hos pitals— Rural and Urban (Nos.) .
12-3 o-6 12-9
121-6 24>I
198-0 2X2-1 226-2 248-1 61-3 60-6
43-8 '4 6 - 5 47 -7 5r "i 9 ’ 9 53'0
3,074 4,686 7,283 15,800 14,049
3-39 5-06 7 -09 11-o 1-15
124 127 136 N .A .
9,494 9,598 9,806 N.A.
PLAN OUTLAY AND ITS FINANCING *
I. P l a n O u t l a y
A ccording to the latest data available, the aggregate outlay on
the plan over the five .years was about Rs. 1,960 crores. This
esti mate is based on the ‘accounts’ for the first four years and
an approximation for the fifth year in the light of the ‘revised
estimates’ and certain other data bearing on the actual
outturn.
2. The bulk of the discussion in this chapter is, however, based on
the accounts for the first four years and the ‘revised estimates’
for the fifth year as all the other relevant magnitudes in the
budget documents can be related to these estimates only.
3. The distribution of the plan outlay between the Centre and the
States year by year is shown in the table below:
(Rs. crores)
1951- 1952- 1953- 1954- Total 1955-56 Total Plan target 52 53 54 55
for 4 for 5 ------ :--------------------
--------------------------------------------years (Revised years
(Accounts) 1951- Estimate) 1951- Original Revised
55 56
Centre . . 132.1 125.4 181.3 283.6 722.4 392-5 IH 4 -9 1233-7
1389-5
States . . 127.3 142.2 161.7 192-3 623.5 274.0 897-5 835.0
988.2
T o tal 259.4 267.6 343.0 475-9 1345-9 666.5 2012.4 2068.7
2377.7
The plan as formulated in 1952 proposed a total outlay of Rs. 2,069
crores by the Central and State Governments together- Later, the
plan was expanded and various adjustments were made mainly with a
view to stepping up the aggregate outlay from the levels in the
early years and to provide more employment opportunities. These
additions, it was recognised, were in part at least substitutions
for schemes in respect of which progress was slow for various
reasons. These adjustments raised the size of the plan to Rs. 2,378
crores. As the above table shows, the target ot expenditure to be
incurred by the Centre was Rs. 1,390 crores and that of all States
taken together
18
PLAN OUTLAY' AND ITS FINANCING 19
was Rs. 988 crores. As compared to these revised targets the ex
penditure by the Centre is estimated to have been about Rs. 1,115
crores and the expenditure by the States gbout Rs. 897 crores. Even
allowing for the downward adjustments in the revised estimates for
1955-56 because of the usual divergence between the revised
estimates and the actuals, the step up in expenditure both at the
Centre and in the States over the period of the plan has been
impressive, the expenditure by the Centre in 1955-56 being a little
under three times the level of expenditure in 1951-52 and that by
the States slightly over double the level in the first year of the
plan. The slow start of the plan in the initial years has been
commented on in the earlier reports of the Planning Commission.
There was a substantial step up in the fourth and fifth years, as
much as 57 per cent of the total expenditure over the five-year
period being accounted for by these two years. As the discussion in
this chapter will show, the progress in raising resources and the
pattern of financing that emerged are linked closely with the
phasing of plan outlay in the manner just described.
4. The following table shows the progress of expenditure at the
Centre and in the States year by year and under major develop
mental heads.
Progress o f expenditure at the Centre and in the States by major
heads o f development
( Rs. crores)
Total 1955-56 Total for Plan provisions Percent- 1951-52 1952-53
1953-54 1954-55 for (Revised five years - -age short — ------
---------- — — . . . ,— four Estimate) 1951-56 Original Revised
fall (Col.
(Accounts) years 8 to Col. 1951-55 10)
I 2 3 * 4 5 »
6 7 8 9 10 II
1. Agriculture . 29-3 2 8 6 37*1 52*4 147*4 79-5 226-9 240*8 249-3
9*0
Centre . . 1*9 3 9 n * 6 21-3 38-7 32-9 71-6 66*3 83-3 I4 ’ 3
States • • 27-4 24*7 25-5 31*1 108-7 46-6 155*3 174*5 165-4
6*1
2. C .P . & N .E.S. ... 1*4 5*9 17*4 2 4 7 3 2 6 57*3 90-0 90 0
36-3
Centre . . 1*4 5*9 17-4 24*7 32-6 57*3 9 0 0 90 0 36-3 States *
•
3. Irrigation & Multi-purpose Projects . 6 i - i 72-8 83-0 9 9
2 316*1 116-0 432-1 433-6 468 8 * 7*8
Centre . . 35-4 41*4 51*2 55'8 183-8 57 -o 240*8 265-9 255*9 5*9
States . . 25*7 31*4 31-8 43M 132-3 59*0 I 9I -3 167-7 212*9
IO'O
4. Power Projects 22-3 25-0 28-5 29-7 105*5 47*4 152-9 127-5 178-6
* i 4*4
Centre . . States . . 22-3 25*0 28*5 29-7 105*5 47*4 152*9 127-5
178*6 14*4
20 REVIEW OF THE FIRST FIVE YEAR PLAN
1951-52 1952-53 1953-54 1954-55 Total 1955-56 Total for for
(Revised five years
Plan provision
Original Revised
10; (Accounts] years
1*51-50
I 2 3 4 5 6 7 8 9 zo 11
5. Industry . io*6 9*4 1 8 4 21*5 59*9 39-9 99-8 172*9 188*2 47
*o
Centre . . 6*8 5*8 13-0 i6*6 4 2 2 3 4 1 76-3 146*7 158*8
51*9
States . . 3*8 3*6 5*4 4*9 17*7 S-8 23-5 26*2 2 9 4 20-4
6. Medical and Public Health . 11*7 13-2 16*5 22*9 64*3 36-6 100-9
100*9 137*8 26*8
Centre . . 0*1 0*2 2*4 5 3 8-0 5-8 13-8 17 -9 20*3 32-5 States . .
n * 6 13*0 14*1 17*6 56*3 30-8 87-1 8 3 0 117-5 25-8
7. Rehabilitation 26*2 20-2 13*5 15*7 75*6 21-7 97.3 85-0 135*7
28-2
Centre . . 26*2 20*2 13*5 15*7 75*6 2 1-7 9 7 3 85*0 135*7
28*2
States * . .. . .. . ••• .. . . . . .. .
8. Transport & Communi eations. 68-7 6 3 8 8 5*7 1 3 3 8 352-0
179-5 531-5 498*5 570*0 6-7
Centre . • 5 6 2 45*4 63*5 108*3 273-4 146-3 419*7 409-5 466*1 9
9
States . • 12-5 1 8 4 22-2 25 *5 7 8 6 33-2 111*8 89-0 1 0 3 9 (— )
7'6 9. Other heads* • 2 9.5 33*2 54*4 83*3 200-4 H 3-3 313*7 319*5
359*3 12-7
Centre . . 5*5 7-1 20*2 43*2 76-0 62-1 138*1 152-4 178*8 22*7
States . . 2 4 0 26*1 34*2 40*1 124-4 51-2 175*6 167*1 180*5 2*7 G
u n d T o t a l . 259*4 267-6 343*o 475'9 1345-9 666-5 2012*4 20687
2377*7 15-4 _
Centre . . 132*1 1* 5*4 181*3 283*6 722-4 392-5 1114*9 I23$-7
1389*5 1 9 8
States . . 127*3 142*2 161*7 192*3 623‘ 5 274-0 897*5 835*0 988*2
9'2
'Inclusive o f local development works.
As compared to the revised plan provisions, there have been short*
falls practically under all heads. In general, these shortfalls
have occurred either because of the late commencement of the
schemes or because of inadequate administrative and organisational
arrange ments for implementation. In the case of industrial
programmes, for example, the shortfall was due to the fact that the
preliminary arrangements and negotiations in regard to the iron and
steel and heavy electrical plants took much longer time than was
expected. In the case of community projects, to take another
example, the pro vision of Rs. 90 crores was only a rough
estimate, and secondly the level of expenditure proposed per unit
of development area was re duced later in the light of experience.
Moreover, the arrangements made for the sharing of this expenditure
involved some outlay by the States which has remained outside the
plan. The performance under major heads had been reviewed in detail
in the appropriate chapters in this report.
PLAN OUTLAY AND ITS FINANCING 21
5. The following table compares the pattern of outlay as it actual
ly materialised over the plan period with the pattern that was in
view when the plan was initially formulated.
Per cent of the total outlay as now estimated
Per cent of the total outlay as originally proposed
i . Agriculture and Community Development 15.0 1 6 0
2. Irrigation and Power . . • • 29 0 28-0
3. Industries . . • • 5 0 8-0
4. Transport and Communications . . 26-0 2 4 0
S. Social Services (including miscellaneous) . . 25-0 2 4 '0
T o t a l . . . • . IOO-O IOO-O
It will be observed that apart from the outlay on industries, where
a large shortfall occurred, the rest of the pattern conforms fairly
closely to the initial order of priorities accepted in the plan. As
much as 43* per cent of the plan outlay was devoted to agriculture
and irrigation and power, which were the first priorities in the
plan. Transport and communications absorbed 26 per cent of the plan
expenditure, and social services including rehabilitation of
displaced persons and some miscellaneous items also accounted for
another 26 per cent.
6. The distribution of the aggregate plan outlay in the field of
in vestment and current expenditure has been broadly in the ratio
of {3 to 1. The aggregate expenditure on capital account
corresponding to the total outlay of Rs. 2,012 crores amounts to
Rs. 1,470 crores, the balance, namely, Rs. 542 crores being
expenditure on revenue account. Part of this latter has been of the
nature of investment, so that on the whole, if aggregate
expenditure on the plan is taken at Rs. 1,960 crores as suggested
earlier, the total of investment in the public sector would work
out at around Rs. 1,500 crores. This, as mentioned in the earlier
chapter, together with the estimated invest ment of about Rs.
1,600 crores in the private sector, gives a total of ibout Rs.
3,100 crores of aggregate investment in the economy.
7. The progress of development expenditure at the Centre and »y
each individual State is given in a series of detailed tables at
the » d of this report. For purposes of convenience a synoptic
table
22 REVIBW OP THE FIRST FIV1 YBAR PLAN
showing the expenditure incurred by the Centre and by each iindivi
sual State relatively to the plan targets is given below:
Expenditure incurred on the Plan (Rs. crores)
1951-56 E xpenditure •—— — ----- incuirred as
Expenditure percentage incurred o f target
J. Centre : II . States
1. Andhra and Madras
P a r t ‘ B ’
10. Hyderabad
Parts ‘ C ’ a n d ‘D ’ .
1114-9
149-8
21-0
T o t a l : C entre & States 2012-4 84-6
PLAN OUTLAY AND ITS FINANCING 23
. II. F in a n c in g o f t h e P l a n
8. The picture of financial resources for the Plan—Centre and
States combined—on the basis of the ‘accounts’ for the first four
years and the ‘revised estimates’ for the fifth year is shown in
the table below: —
Financing of the Plan 1951-56 (Rs. crores)
1951-52 1952-53 1953-54 1954-55 Total for 4 1955-56. Total Plan
1951*56
\ | (Account 0 \ 195[-55 (Revised 5 years Original Revised
Estimate) 1951-56
Outlay oa the plan
1 . 475*9 I3<
666'5 2012 4 2069 9 2377 7
2. Budgetary resources 2048 141*3 2 4 6 1 3 6 8 6 9608 3 1 6 5
1277*3 1258*0
3. External assistance 64 9 45'6 18 ‘ 5 16 0 145*0 58*2 203 2
521*0
4. Deficit — 1 0 3 8 0 7 78*4 91*3 2 4 0 1 2 9 1 8 53**9 2900
In the plan as it was originally formulated1, the estimate of total
domestic resources to be raised by way of taxes, loans, small
savings etc. was Rs. 1,258 crores, the balance of Rs. 811 crores
being financed from external assistance to the extent available and
from a combination of measures to raise domestic resources by way
of taxes or loans or deficit finance as the circumstances might
warrant. External assistance to the tune of Rs. 156 crores was
already in sight when the plan was formulated and it was expected
that some further external assistance would also be available. It
was recog nised, at the same time that deficit financing should
not, unless special circumstances arose, exceed Rs. 290 crores
which corresponded to the drawal odE sterling balances. Actually,
as the table above Jhows, (apart from the fact that the figures for
the fifth year are subject
to revision) budgetary resources have been close to the
expectations; external assistance utilised came to about Rs. 200
crores, v^hich is only about Rs- 50 crores more than the assistance
in sight when the plan was formulated., Consequently, the extent of
deficit financing necessary had to exceed the limit of Rs. 290
orores indicat ed in the Plan. As will be shown later, both the
plan outlay in the fifth year as well as the extent of deficit
financing were smaller "than the above table will indicate.
9. Appendix I at the end of this chapter gives a more detailed
break-down of the contribution of the various m d|s of financing to
the combined outlay of the Centre and the States^rear by year
and
24 REVIEW OF THE FIRST FIVE YEAR PLAN
for the five-year period- Appendix II presents a similar break-down
for the Centre, and Appendix III for the States taken together.
Appendices III(l) to 111(18) relate to the financing of the plan
for eaeh State separately.
10. As will be seen from Appendix II, of the outlay of Rs. 1115
crores at the Centre over the five-year period, Rs. 420 crores or
about 38 per cent of the total was financed from revenue surpluses
and the earnings of railways; Rs. 358 crores or some 32 per cent
became available by way of net receipts from loans, small savings
and other capital receipts. As against this total of Rs. 778
crores, the Centre transferred Rs. 350 crores to the States by way
of Central assistance for State Plan. The balance of Rs. 428 crores
remaining with the Centre was augmented by the receipt of Rs. 203
crores of funds from abroad- Thus the Centre had at its disposal a
sum of Rs. 631 crores against its Plan outlay of Rs. 1115 crores.
On this basis, deficit financing at the Centre for the five-year
period works out at Rs. 484 crores. The account figures for 1955-56
show the actual deficit in that year at Rs. 180 crores, which means
that for the five-year period the deficit of the Centre was Rs. 428
crores-
11. In the States, (Appendix III) the total outlay of Rs. 897
crores was financed as follows: —
(Rs. crores)
(i) Current revenues . . . . . . 269 (ii) Public borrowings and
capital receipts . . 230 (iii) Central assistance . . . . . . 350
(iv) Deficit financing . . . . . . 48
T otal 897
The States found from their revenues about 30 per cent of the
resources required for financing their Plans. Another 26 per cent
or so was raised by way of borrowings and other capital receipts
and as much as 39 per cent represents the contribution of the
Centre. There was still left a deficit of about 5 per cent on the
basis of the revised estimates for the final year that we have been
following. Actually, however, taking the Plan period as a whole
there has been little deficit financing by the States taken
together-
III. T h e T a x E f f o r t
12. In the plan as initially formulated the contribution of current
revenues including fresh taxation and the receipts of railways was
estimated at Us. 740 crores. Thus, the surpluses of public authori
ties were assumed to contribute 58 per cent of the total budgetary
resources amounting to Rs. 1,258 crores, While, as mentioned
PLAN OUTLAY AND ITS FINANCING 25
earlier, the aggregate budgetary resources were, more or less, of
the order initially expected, the contribution of current revenues
and the earnings of the railways over the plan period work out at
Rs. 690 crores as compared to the target of Rs. 740 crores. The
shortfall is accounted for by lower contributions from the
railways, the balance from revenues taking the Centre and the
States together being close to expectations. The \Centre was able
to find from current revenues Rs. 145 crores more than the plan
targets required while in the States there was almost an equal
shortfall. This shortfall in the States occurred in spite of the
transfer of Rs- 80 crores or so to them under the Finance
Commission’s award.
13- It was recognised from the very beginning that the aim of
fiscal policy both at the Centre and in the States should be to
provide from out of the current revenues as large an amount as
possible to finance the rising investment expenditures to be
undertaken in the course of the plan period- The Central Government
imposed sub stantial taxation in 1951-52 partly for this reason
but mainly in order to generate a disinflationary climate. Export
duties which had been raised in 1950-51 were raised further on a
number of commodities in order to draw into the public exchequer a
proportion of the in creasing incomes being made in the export
sector. The other measures taken in that year include a surcharge
on income-tax, an increase in the corporation tax, additional
excise duties and import duties. Altogether, the increase in
taxation proposed in that year amounted to Rs 32 crores. Towards
the close of the year, it became necessary to reduce export duty on
jute. In the two subsequent years, inflationary pressures had
abated and some further reductions had to be made in export duties.
The other changes made in these two years were relatively small. In
1954-55, sizeable increases were made again in excise duties. By
this time, the expenditure on the p lan had risen substantially and
it was intended that) the outlay should be stepped up as rapidly as
possible in order to ensure the fulfilment of the plan. The
additional taxation imposed in 1954-55 amounted to Rs. 11' crores.
In 1955-56, the final year of the plan, both direct and indirect
taxation was raised further, the major increases being under
income-tax and) excise duties. The yield of the new tax measures
was estimated at Rs. 17 crores for the year. Altogether, over the
five years the yield of additional measures of taxation at the
Centre excluding export duties, which in their nature are variable,
was about Rs. 175 crores.
14. The contribution of railways from their current revenues to-
the financing of their development programmes totalled Rs. 115
crores over the plan period as compared to Rs. 170 crores for
which* credit was taken in the estimates presented initially in the
Plan document. The railway fares were out ift> lu 1951-52, the
estimated
yield of the increases being Rs. 18 crores for the year. Some
adjust ments were also made in freights rates in 1951-52 and
1952-53. The railway fares and freights were again changed somewhat
in 1955-56. Over the five-year period, the increases in fares and
freights are •estimated to have brought in about Rs. 100 crores.
Nevertheless, the contribution of the railways was not upto the
initial expectations because of the increase in working expenses
and a fall in earnings consequent on the emergence of recessionary
conditions in 1952-53 and 1953-54.
r
15. As regards the States, the contribution from revenues over the
five-year period was Rs. 269 crores as compared to the plan
-estimate of Rs. 410 crores—a short-fall of about 34 per
cent—despite, .as mentioned earlier, the transfer of Rs. 80 crores
or so to them as a result of the Finance Commission’s award- The
target of additional taxation by States as laid down in the plan
was Rs. 230 -crores. Actually, it is estimated that the total yield
of all the measures taken by State Governments during the plan
period was of the order of Rs. 80 crores. In the report on the
Five-Year Plan, the State-wise break-up of this total of Rs. 230
crores was not fully worked out. This was done later and targets
for each individual State were worked out in consultation with the
authorities con-
cerned. The following table compares'the performance in respect of
additional taxation by each State relatively to the targets.
Additional Taxation in the States (Rs. crores)
States Five -year Achieve- targets ments
(1951—56)
Part ‘ A ’
2-0
4-5
PLAN OUTLAY AND ITS FINANCING 27
(Rs. crores)
T o t a l ‘ A ’ and ‘ B ’ . • • • • ' 230-3 80-4
Bombay fulfilled the target fully. Assam and Punjab almost
fulfilled the target. In other States, the actual tax effort was
much below the targets prescribed- It might be mentioned in this
con nection that the target of Rs. 230 crores included, in some
Cases, measures of economy in the matter of expenditure. It was
also recognised that these targets were not based on any close
study of the taxable capacity of the States- Nevertheless, the
conclusion is inescapable that the progress in the matter of
additional taxation in.the States has not been commensurate with
the requirements of
16. Of the total yield of Rs. 80 crores, about a half was accounted
for by general sales tax, tax on sale of motor spirit and sales tax
on tobacco, cigarettes and cigars. Taxes on motor vehicles also
made a significant contribution. While irrigation rates were put up
in some States, these increases yielded only Rs. 6 crores as
compared to the plan estimate of Rs. 29*5 crores. The additional
revenue from taxation of land which the plan had placed at Rs. 34
crores turned out to be only Rs. 5-4 crores. It must also be men
tioned that while the plan had estimated the States’ share of
Estate Duty at Rs. 21 crores, actually this source contributed only
a little
28 REVIEW OP THE FIRST F|VE YEAR PLAN
over Rs. 2 crores. The following table shows itemwise break-up o f
the additional tax measures in the States:—
(Rs. crores)
1. Taxation on Land (land revenue, agricultural . . 5-4 income-tax
etc.)
2. Irrigation r a t e s
.........................................................
.......... 6 -0
3. Electricity duties . . . . . . . 3 -0
4. Motor vehicles tax ...........................................
9-3
5. General sales tax 31-8
6. Tax on sale of motpr spirit . . . . . 6 -0
7. Sales tax on tobacco, cigarettes and cigars . . 1*4
8. Tax on capital transfers (Estate Duty and transfer of property
in urban a r e a s ) .................................3* 1
9. Surcharge on passenger travelling by public transport and buses.
. * ......................................................
5-3
io. M is c e lla n e o u s
......................................................9 -1
T o t a l . . 80-4
IV. P u b lic B o r r o w in g s
17. At the time the plan was formulated, the outlook for public
borrowings was far from encouraging, the market in fact being so*
Weak that there was pressure on the Reserve Bank to support it.
Consequently, the targets for borrowing by the Centre and by the
States were kept at low levels, viz., Rs. 36 crores for the Centre
and Rs. 79 crores for the States. Taking the Centre and the States,
together the net borrowing from the market in 1951-52 was negative
to the extent of Rs. 22-8 crores. In other words, Rs. 22-8 crores
was paid out by way of repayment of maturing loans- In the next two
years the market showed some improvement, but it was not until the
fourth year that substantial borrowing programmes could be
undertaken. The Centre continued to make repayments for the first
three years, Rs. 34'2 crores in 1951-52, Rs. O'9 crore in 1952-53
and Rs- 37-2 crores in 1953-54. The States were able to put through
moderate borrowing programmes in the first two years and were able
to step them up substantially in 1953-54. In the first three years
of the plan taking the Centre and the States together, repay ments
of maturing loans exceeded the contribution of fresh loans by Rs. 5
crores. In 1954-55 the Centre raised a combined loan of Rs. 159
crores of which Rs. 46 crores represented maturities, the net
borrowings thus being Rs. 113 crores. Of this, Rs. 26 crores was
made available to the States. In addition, two States were able to
borrow
PLAN OUTLAY AND ITS FINANCING 29
Rs. 7 crores directly. In 1955-56 the net loan receipts of the
Centre and the States combined amounted to Rs. 89:4 crores. Over
the five years, the plan target for market loans was exceeded by
Rs. 89 crores.
V. S m a l l S a v in g s
18. The following table shows the collections of small savings
annually for the plan period:—
(Rs. crores) Year
T o t a l . . 237-2
The record of small savings showed steady improvement over the plan
period, the total collection being Rs. 237 crores as compared to
the target of Rs. 225 crores. The collections from small savings by
the end of the plan period were about double the collections in
1950-51, and it is significant that over the plan period they have
financed about 12 per Cent of the plan outlay. In addition to these
small savings, provident fund contributions and other similar items
of unfunded debt at the Centre contributed Rs. 67 crores over the
five-year period.
VI- O t h e r C a p ita l R e c e ip ts
19. In the plan, the composite head of deposits, funds and other
miscellaneous sources was estimated to show a net accretion of Rs.
132-8 crores. It was stressed in that context that the outturn on'
this head which included a large variety of items was liable to
show rather large variations in either direction and the estimate
was, therefore, only notional. The net contribution under this head
is now estimated at Rs. 79-6 crores, the short-fall being of the
order of Rs- 53 crores.
VII. E x t e r n a l A s s is t a n c e
20. External assistance (in loans and grants) made available over
the plan period for development programmes in the public sector
aggregated to Rs. 296 crores. Of this about Rs. 188 crores was
utilised over the five years, leaving a carry forward of Rs. 108
crores for the next plan period- The following table shows the
amounts
authorised from various sources and utilised during the plan period
year by year: '
Authorisation and Utilisation of External Assistance (Public
Sector) 1951-52 to 1955-56.
(Rs. crores)
30 REVIEW OP THE FIRST FIVE YEAR PLAN
Loans U. S. Government— 90- 3
Wheat Loan
4-5
1-3
90-3
7-6
T o tal L oans . 142-1 6o-8 33-6 i -5 0-7 5-8 102-4
Grants Indo-U.S. Aid Programme 102* 5 4-1 14-4 12- 7 27-0
58-2
Colombo Plan :
Australia • . 11-08 3-7 0-2 0*2 o- 8 0-2 5-1
^New Zealand . 1*7 0-3 •• • • •• •• o-3
U .K . . . 0 -4 • * •• • • 0-01 0 0 3 0-04
Ford Foundation 5-6 • • 0-6 * 0-4 0-5 o-6 2* 1
Indo-Norwegian Programme o- 66 •• •• . 0*05 0-09 0 -13 0-27
T o ta l G rants 154- 28 4-0 12-0 17-05 16-10 36-56 85-71
T otal G rants an d L oans 296- 38 64-8 45-6 18-55 16- 80 42-36 18
8 .II
21. Of the authorisations, the largest share—Rs. 232 crores—was
contributed by the U.S. Government. The U.S. Government assistance
was made up of Rs. 90 crores under the Wheat Loan and Rs. 142
crores under the Indo-U.S. Aid Programme. Loans from the Interna
tional Bank, including the unutilised portion of the loans advanced
before the plan period, amounted to a little over Rs. 12 crores.
Contributions of Colombo Plan countries totalled about Rs. 45-5
crores; and of this the share of _the Canadian Government was Rs.
32 crores. Assistance from the Ford Foundation and the Norwegian
Government amounted to Rs.5‘ 6 crores and Rs. O’ 66
PLAN OUTLAY AND ITS FINANCING 31
crores respectively. Of the aggregate external assistance received
in the plan period, Rs. 142 crores was in the form of loans and Rs.
154 crores was grants. Apart from the U.S. Wheat Loan authoris ed
in the first year of the plan, authorisations of external
assistance ranged between Rs. 35 crores and Rs. 48 crores a
year.
22. Of the total utilisations of Rs. 188 crores, as much as Rs.
110*4- crores materialised in the first two years of the plan.
However, as much as Rs. 90 3 crores was on account of the U.S.
Wheat Loan. In the next two years the utilisation of funds
available under these programmes totalled Rs. 35 crores. The low
rate of utilisa tion in the earlier years of the plan was due
largely to the delays in the formulation of programmes, the
shortage of requisite equip ment and personnel, and the difficult
position in steel and shipping. Steps were taken in later years to
overcome these difficulties; as a result, utilisation was speeded
up in the last year of the plan, when, it amounted to Rs. 42
crores.
23. External assistance was used mainly for the p